British Secretary of State for Exiting the European UnionDavid Davis and EU chief Brexit negotiator Michel Barnier address the media after the third round of Brexit talks.
Photograph: Emmanuel Dunand/AFP/Getty Images

On Wednesday afternoon, with Jean Claude Juncker’s state of the union speech calling for swifter, deeper integration still ringing in their ears, a gaggle of political leaders in the European parliament met in a room opposite the chamber in Strasbourg.

In the appositely named Salle de Margaret Thatcher, Guy Verhofstadt, the colourful former Belgian prime minister who is coordinating MEPs’ response to Brexit, discussed with colleagues from the pro-European political parties on the parliament’s Brexit steering group how they should respond to the seeming stalemate in the Brexit negotiations. The latest draft of a parliamentary resolution was discussed, lamenting the failure of the talks to develop on the key opening issues – citizens’ rights, the Irish border and the financial settlement.

While May readies her most important speech yet, Boris waits in the wings

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The resolution is set to advise the member states’ leaders, who will make the big decision at a summit in Brussels on 19-20 October, that the negotiations cannot move on to trade as things stand. “The talk at the meeting was mainly about when to hold a vote on it in the parliament,” an EU official said. “They want to have it on 3 October – the day before Theresa May makes her speech to Tory conference. They want the Tory delegates to hear about it.”

The public reprimand for the prime minister at a sensitive point in the political calendar isn’t just about grandstanding from the MEPs. Her government’s offers on citizens’ rights and the Irish border, along with a lack of offer on the financial settlement, has genuinely concerned senior figures within the European commission leading the negotiations and among the member states.

On citizens’ rights, the offer to give EU nationals the same rights as British citizens would leave them with fewer rights than today. The solutions proposed in Ireland, involving the suspension of the normal border checks one would expect for a country outside the EU’s customs union and single market, have been rejected almost out of hand by the commission, as an affront to the legal order. And on the financial settlement – perhaps the biggest stumbling block – the EU’s chief negotiator has questioned whether Brussels can really trust the British on anything, given Downing Street’s reluctance to admit Britain has a legal duty to live up to the spending commitments already made by the EU.

Meanwhile, the British claim they can’t make progress on the Irish border or divorce bill unless they know what their relationship with the EU will be after 29 March 2019, when the UK leaves the bloc. That newly minted argument has particularly riled the commission, given that it was thought the British had accepted the idea of sequenced talks, with the trading relationship to be discussed once “sufficient progress” had been made on the key opening issues, as enshrined in article 50 guidelines agreed by the EU leaders in April. Just to add insult to injury, the Department for Exiting the EU has let it be known that a delay to the next round of talks, allowing the prime minister to make her major speech in Florence on Thursday, will permit EU leaders time to persuade Barnier to be more flexible in the fourth round of talks, which begin a few days later. There is a suspicion that the British also believe that once Angela Merkel is re-elected as Germany’s chancellor this month, she will have political capital to expend on making things happen.

And now there is the unwelcome reappearance on the Brexit battlefield of Boris Johnson, with his insistence that the UK will succeed “mightily” as a low-regulation economy, no longer paying into the EU budget after March 2019. Speaking to the Observer, the leader of the socialist bloc, Gianni Pittella, fumed: “Boris Johnson is embarrassing his country once again by repeating the lies of the Leave campaign. He is jeopardising the Brexit negotiations by threatening to turn the UK into a low-regulation economy. And he insults the intelligence of the British people with his tub-thumping jingoism. It is more in keeping with Trump Tower than Whitehall.”

The Italian MEP, echoing the thoughts of many in the European commission, added: “This appears to be yet another twist in the internal warfare within the Conservative party. It does the UK no credit and no service in the wider world. I fear the British government is heading towards the Brexit rocks.”

Guntram Wolff, a former adviser to the French government, and director of the Bruegel thinktank, said there were grounds for concern. “Things are being lost in translation – it’s a matter of learning to talk to each other,” he said. “I would never underestimate the importance of process and the legal framework for the negotiations to the EU,” he added. “For better or worse, that is how the EU works. Because they are a collective entity of 27 member states, the EU can’t – or it is very difficult to – go beyond [what has been agreed already].

“The idea that we will have the white knight of Angela Merkel riding in and delivering a great compromise doesn’t really work if the process isn’t being followed. And will she want to spend political capital on Brexit? I think only if she thinks a deal is realistic and the groundwork is there.”

For those within Europe who want a mutually beneficial deal to be struck, and that would include most but perhaps not all in Brussels, the brevity of the mention of Britain’s departure in Juncker’s speech last week was an additional cause for concern. In a speech designed to kickstart a new chapter for the EU, Juncker told MEPs that, as much as he would always regret the UK’s decision last June, the issue was not the “be all and end all”. Brexit was not “Europe’s future”, and the continent, now opening trade negotiations with Australia and New Zealand, would move on.

Andrius Kubilius, a former prime minister of Lithuania, who sits on his country’s Brexit committee, admitted it was not a good omen. “I am in some ways less optimistic than I was,” he said. “Several months ago getting a deal with Britain appeared to be the most important thing we needed to get done. It doesn’t feel like that any more.”

Mairead McGuinness, an Irish MEP and vice-president of the European parliament, who met Barnier last week, said she didn’t believe the talks were quite at a deadlock, but that the negotiations did require an injection of urgency.

“It is more sluggish than we would like it to be,” McGuinness said. “I think from the EU side the timeline needs to be respected. It seems at some point [the British] decided, forget what we agreed and we will talk with the member states. But that’s not possible. We would like to hear her say that she will do as agreed, and make progress on the three opening issues. And it seems there has been less movement on money than the other two.”

Indeed, it is hard to get away from the suspicion that money is the key to it all. A variety of figures for Britain’s divorce bill have been published in the press, some certainly emanating from meetings of diplomats and officials in the EU’s Berlaymont headquarters. But, in truth, the EU is no keener than Britain, at this stage, for figures to be aired, whether closer to €30bn or €100bn, given the sensitivities in European capitals, whether they be net recipients or contributors.

However, the EU27 do want greater confidence that the UK is not going to leave them with a giant hole in their finances in the immediate years after Brexit, said Vasco Cal, a former economic adviser in the commission.

“Whatever Britain fails to pay, Germany will have to pay,” said Cal. “I think the UK is looking to hold out on an offer of money until the end, when they will agree to pay for their commitments made in the past but not for access to the internal market during the transition period. The idea being that there will be so much relief among the EU that it will be accepted. It’s a gamble, of course. It could go wrong.”